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Insider negotiation tactics to get the best price in a competitive market
In a competitive market with rising prices and high demand, successful buyers can avoid overpaying by acting swiftly, understanding the property, and negotiating strategically. Here’s how to get the best price.
Brady Marcs Buyers Advisory buyers’ agent Brady Yoshia sat down with First Property Buyer Show host Emilie Lauer to discuss how buyers can avoid overpaying or making rushed decisions in a competitive market.
According to Yoshia, one of the first steps buyers should take to avoid overpaying is to set a clear budget and decide how much, if any, they are willing to exceed it.
She also said that buyers can secure the “right property” by conducting thorough research, due diligence, and managing their emotions to avoid becoming too attached or making rash decisions.
Ultimately, she said everyone needed to go at their own pace, ensure they had everything in order, and be prepared to act quickly when their chance arises.
Yoshia said that to avoid overpaying, she encourages buyers to understand the type of dwelling they are looking for and the difference between suburbs, which will then influence their offers.
Additionally, she said that when attending inspections, buyers should ask questions and have as many details as possible about the property.
“You need to find out as much information as possible as to why the seller is selling – are they highly motivated or not? That will give you an indication of where you need to position your first offer,” she said.
“Once you've understood all of that and you've got all of your due diligence done, then you can go in and make your first offer.”
She warned that buyers who made an offer without approved finances risk losing the property, as they won’t be able to act quickly.
“Once an offer is in, the negotiation starts, and you want to be in a position to exchange contracts almost immediately to eliminate the competition.”
To avoid overpaying, Yoshia said buyers should set clear boundaries, understand their maximum budget, and know when to walk away.
She said that by analysing recent sales in the suburbs, she helps clients position their offers to better match the market without overpaying.
Additionally, she said that dwelling features and whether the property will require renovations will also influence the offer.
“When you put your offer into the agent, you do say, well, I'm putting in an offer of a million based on the work that needs to be done," she said.
“That will give enough feedback for the selling agent to go back to the owner and say, ‘you've got a qualified buyer here, and this is his reasoning.”
Yoshia said that buyers can also try to negotiate on price or the settlement period to get ahead of the competition.
She said buyers should try to understand the vendor’s motivation, as those looking to sell quickly may be persuaded with a shorter settlement, which can help secure the property.
“If they've bought elsewhere, it's best for them to sell and get the money in the bank sooner rather than later,” she said.
“Or the owners haven't found anywhere to buy, and they need more time, and so you can offer a longer settlement.”
When negotiating on price, Yoshia said that the more buyers know about the property, the more in control they feel, and the better the outcome will be.
“The problem is that people feel it's so nerve-wracking because they're unsure as to whether it is the right property, and they’re also unsure as to whether there are any red flags,” Yoshia said.
“So the more prepared you are, the more information you've found out about the property and the surrounding area, the better you are placed to be successful.”
Yoshia said that when making their offer, buyers should give a fair offer from the get-go, and not lowball the agent.
“You shouldn't give away your maximum budget, but also not go too low with the offer, as agents might not take you seriously in a competitive market.”
Similarly, to be successful at auctions, Yoshia said it was important for buyers to be financially ready, have a team of experts available, and set a maximum price to avoid rushed decisions, given there is no cooling-off period.
“You can again find out why the owners are selling, have the contract reviewed, and any contract changes,” she said.
“You could even get your solicitor to liaise with the vendor’s solicitor and approach the agent, and either put in an offer or go to them with a signed contract with your maximum offer.”
Despite the need to move quickly, Yoshia said buyers need to stay in control of their emotions and avoid becoming attached to a property.
“You don't want to hide all emotions, you want to keep the emotion there, but you want to try, and tell yourself, I'm going to give it my best shot, and whatever happens will be”, she said.
“Its good to be reminded that not getting the property isn’t the end of the world, because there will be another one.”
Yoshia also warned buyers against compromising too much on key property features, such as natural lighting, stairs, or location, and skipping essential checks, such as having a strata report reviewed by a conveyancer.
“That is a very, very, very big mistake and can be a very expensive mistake.
“So make sure you have the strata report reviewed because that will tell you a lot about the age of the building, any issues, any upcoming special levies,” she concluded.
Listen to the full episode here